Audit program: Key steps and best practices

A reliable audit program is invaluable for keeping an organization on track with its goals and regulatory requirements–which can have severe consequences if violated. By setting clear guidelines and a repeatable framework, an audit program helps ensure that audits are conducted thoroughly and consistently.

Setting up and implementing an audit program needs a lot of planning, though, along with coordination with stakeholders. In this guide, we’ll walk you through the essential components of an audit program and how to plan and execute it effectively

What is an audit program?

An audit program is a structured plan that describes the processes and rules for conducting audits in an organization. In general, auditing is a systematic, independent and objective examination of certain pre-defined and agreed-upon standards. Financial audits are among the most well-known–for example, auditors would examine financial statements, processes, and controls for this. However, there are other types of audits as well, including for operations, safety, compliance, and quality assurance.

The goal of an audit program is to make sure that all audits follow a consistent process and comply with the company’s broader objectives. It lays down what needs examination, who will conduct the audit, and how you’ll evaluate the findings. It also helps organizations identify areas for improvement, catching issues before they get worse.

Components of an audit program

Your audit program should include the following:

• Objectives and scope – What is the purpose of the audit? This might be ensuring compliance, improving efficiency, or confirming financial accuracy.
• Criteria and standards – The audit will be measured against these–for example, regulatory guidelines, industry standards, or internal policies.
• Roles and responsibilities – Assign key roles within the audit process, such as audit lead, team members, and key contacts from each department.
• Audit schedule and frequency – Set a clear timeline for each audit, including start and end dates, as well as deadlines for report submissions and follow-ups.
• Procedures and methodology – Outline the step-by-step procedures for audits, from data collection and analysis to reporting, as well as methodologies like interviews and document reviews.
• Documentation templates – Include standardized templates for documentation and reporting, which help auditors record findings consistently.
• Follow-up and corrective action plans – Define a process for implementing corrective actions based on audit findings.

Preparing your audit program

Since it has many components, an audit program begins with careful planning. It should have clear, comprehensive procedures that are easy to follow. The program should also be written in such a way that it can’t be misunderstood by anyone involved in the process – from senior management to interns.

Here’s how to prepare an audit program to include the fundamentals:

1. Define the scope of your audits. Identify who will be involved in the process, what assets or departments will be under review, what information you need to collect, and what data will be used for analysis. Consider any relevant compliance standards or internal objectives that will guide your evaluation.
2. Identify key stakeholders and the organizational structure. Understand the relationships among key personnel, departments, and external partners. You’ll need to map this out so you can anticipate who should be part of the audit processes and what approvals are necessary.
3. Determine which systems you’re going to audit. You can do this by interviewing stakeholders and reviewing documentation about current systems, as well as any planned changes or upgrades that might affect your review procedures (e.g., system upgrades, mergers/acquisitions).
4. Conduct initial interviews with key stakeholders. This includes: management, technical personnel and users of the system(s) being evaluated. The purpose is to gain a better understanding of how they use those systems and what they expect from them. Make sure you ask questions that will help you determine whether the system(s) are meeting their objectives.
5. Develop your audit plan. This gives you a roadmap for how the audit will be conducted. You’ll detail the exact procedures, schedule the audit timeline, and designating the resources and personnel required. With a clear plan, all stakeholders can understand their roles and the audit can progress smoothly.

Implementing your audit program

Once you’ve gathered all the relevant information, you can follow these essential steps for bringing your audit program to life:

5. Conduct the audit. This step is where the team executes the audit according to the plan. Auditors collect data, conduct interviews, and review processes or controls within the defined scope. You might use audit checklists, templates, or digital forms to ensure that nothing is missed. During the audit, it’s essential to document findings meticulously.
6. Analyze your findings and prepare a report. With the data in hand, your audit team can then analyze it for trends, gaps, or areas needing improvement. You’ll compile the results into a formal report for clear communication with stakeholders. These should include specific observations, any compliance issues found, and recommendations for corrective actions.
7. Implement follow-up actions. After reviewing the audit findings, create a plan to address any issues. Assign action items to relevant team members, set deadlines, and create a system for tracking progress.

Even after conducting audits, your audit program should evolve over time to stay aligned with changing regulations, industry standards, or company goals. Review what went well after each edit cycle and what could be improved, then refine the program as needed.

Using an audit checklist

According to Forbes, an audit checklist is a document or a list of tasks that contains all the necessary steps, items, or activities to be completed during an audit. Its goal is to help the auditor identify all the issues, risks and controls associated with the internal controls system during the audit process. Audit checklists can come in many different forms, whether paper-based or digital, and comply with the needs of the organization.

Most auditing software programs already have a list of standard audit checklist templates that can be used for different types of audits. The purpose of such an internal audit checklist is to ensure that the auditor takes all the appropriate steps to conduct an effective audit.

It is important to always make sure that the comprehensive internal audit checklist you have should be easy to follow and comprehensive enough to cover all aspects of an audit, including verifying any relevant laws, regulations, and policies.

Regardless of the domain, a comprehensive internal audit checklist should include these assessments:

1. Documentation: Ensure that all documentation is complete and accurate.
2. Physical Security: Check for unauthorized access to sensitive areas, such as data centers and server rooms to protect your safety and your client’s sensitive data.
3. Personnel: Ensure that only authorized personnel have access to sensitive areas and equipment.
4. Physical Controls. Examine physical controls such as locks, alarms, cameras and other electronic devices designed to protect against theft or unauthorized access.
5. Electronic Security. Examine electronic security measures, such as passwords and firewalls. This is to ensure the protections are functioning properly and are not vulnerable to attack by hackers or viruses. Intruders attempting to compromise your computer network or steal confidential audit information stored on your servers or workstations is an extremely costly expense.

Important tasks to include in your audit checklist

The audit process typically includes the following procedures to make each audit cost-effective and scalable:

• Identify the purpose and scope of the audit
• Identify risks and controls in place
• Assess the entity’s internal control environment
• Perform audit procedures
• Evaluate evidence obtained during the audit
• Confirm compliance with laws, regulations and policies
• Report results in an audit report
• Provide management with feedback on control deficiencies
• Determine if controls are working properly
• Test control procedures, such as segregation of duties, documentation retention, etc.
• Evaluate results against standards and expectations (internal or external)
• Make corrections if necessary, including recommendations for improvement

Advantages of audit checklists

More accurate record-keeping

An all-inclusive audit planning checklist will help you keep track of everything that you need to do and ensure that all relevant information is present during the audit process. This will make sure that you or your team don’t miss out on any important tasks or procedures.

Time management

Your audit guide can help save time by ensuring that all the necessary steps are successful. Since it has been designed by experts in their respective fields, it can help you avoid any errors while conducting your project.

This means that you will be able to save time, money and effort by not having to redo anything because of mistakes made during its completion. Your checklist can also help you plan your project before you start so that you know exactly what you need to do and how much time it will take for each task.

Onboarding training

Audit guides are also helpful as training tools for new auditors or as a means of ensuring that experienced auditors continue to follow best practices. They can be helpful to ensure that the new hires know all the information they need during an audit, or to improve the turnover rate for current auditors in your team.

Consistency and error-free assessments

A well-written audit checklist ensures consistency across different projects and different people. It also helps in following a standard procedure during the project by making it easier for others to understand and follow the tasks, ensuring that there are no errors during the process.

Create audit checklists effortlessly with software

Lumiform is a powerful audit tool that can help you make sure that your audit checklists are fit for your business structure. We offer templates that you can customize and use over and over again with just a few clicks.

This helps audit teams to cut time and save money spent searching for the perfect audit checklist as Lumiform’s expansive gallery already has one ready for your business whatever its scope or scale. From pre-made ISO audit checklists to quality audits, you will find whatever you are looking for and can customize the template as you see fit.

However, the benefits of using Lumiform’s audit templates don’t end there. Here’s more to consider:

• Powerful & simple – Lumiform provides a remarkably simple user interface, which allows you to create audit checklists. The best thing? You don’t have to be an expert in HTML coding or any other complicated software program because Lumiform is intuitive.
• Complete but never overwhelming – our highly intuitive mobile app allows you to finish your audits faster and error-free, increasing your audit team’s productivity and work performance tenfold.
• Form-fitted to your business – Lumiform offers contract templates in different languages, which include everything from simple financial statement audits to large-scale operational audits. You can even choose whichever template meets your unique audit team’s needs and requirements then customize it by just adding in additional fields or deleting others as required.
• Faster business growth – because you’re using the power of state-of-the-art auditing technology, you can process your internal controls, policies and procedures up to 30%-40% faster than before, scaling your business faster.